Top 8 year-end tax tips

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Act before December 31 to increase your tax breaks1. Defer your income2. Take some last-minute tax deductionsYou can supercharge the tax benefits of your generosity by donating appreciated stock or property rather than cash.Better yet, as long as you’ve owned the asset for more than one year, you get a double tax benefit from the donation: You can deduct the property’s market value on the date of the gift and you avoid paying capital gains tax on the built-up appreciation.an estimated state income tax bill due January 15a property tax bill due early next yearor a doctor’s or hospital bill.If your qualifying expenses exceed the standard deduction, which in 2018 is $12,000 if you are single, or $24,000 if you’re married filing jointly, then you likely should maximize your deductions and itemize.Don’t worry about figuring out if you can itemize or should take the standard deduction. TurboTax will figure it out for you based on your answers to simple questions about your deductible expenses.3. Beware of the Alternative Minimum TaxState and local income taxes and property taxes, for example, are not deductible under the AMT. So, if you expect to be subject to the AMT in 2018, don’t pay the installments that are due in January 2019 in December 2018.4. Sell loser investments to offset gains5. Contribute the maximum to retirement accountsYou have until April 15, 2019 to make IRA contributions for 2018, but the sooner you get your money into the account, the sooner it has the potential to start to grow tax-deferred.Making deductible contributions also reduces your taxable income for the year.You can contribute a maximum of $5,500 to an IRA for 2018, plus an extra $1,000 if you are 50 or older. Use our IRA Calculator to see how much you can contribute.6. Avoid the kiddie taxFor 2018, the kiddie tax taxes a child’s investment income above $2,100 at the same rates as trusts and estates which are typically higher than rates for individuals.If the child is a full-time student who provides less than half of his or her support, the tax usually applies until the year the child turns age 24.7. Check IRA distributionsA 50% excise tax on the amount you should have withdrawn based on your age, your life expectancy, and the amount in the account at the beginning of the year.After that, annual withdrawals must be made by December 31 to avoid the penalty.8. …read more

Source:: AOL.com

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